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Dodd urges Fed to extend CARD Act deadline for CUs

WASHINGTON (8/13/09)--Working closely with the Connecticut Credit Union League, Senate Banking Committee Chairman Chris Dodd (D-Conn.) yesterday urged the Federal Reserve Board to provide relief to credit unions regarding the 21-day rule under the Credit Accountability, Responsibility and Disclosure (CARD) Act as it applies to open-end plans other than credit cards. In a letter to Federal Reserve Board Chairman Ben Bernanke, Sen. Dodd urged the Fed to allow credit unions “more time to come into compliance” for such open-end plans. Under the Act, creditors are required to provide periodic statements to all open-end plan borrowers 21-days before their payment due dates, effective Aug. 20. Credit unions have indicated they can comply with these provisions for credit cards, but many credit unions have indicated that meeting the requirements for all other open-end plans is horrendous, and may not be possible for some credit unions by the rapidly approaching Aug. 20 effective date. Sen. Dodd urged the Fed to extend the current compliance deadline for credit union open-end plans other than credit cards, stating that the existing compliance date has caused “legitimate implementation difficulties” for a credit union product that “was not the primary focus” of the CARD Act. Dodd said that while the main goal of the 21-day provision of the CARD Act is to “ensure” that financial firms provide consumers the necessary window to respond to their billing statements, the rule is causing particular problems for credit unions that offer multi-featured credit plans with sub-accounts. The effort was supported by the Credit Union National Association (CUNA). CUNA said it will continue to pursue relief for credit unions on the issue by urging policymakers to limit the scope of the 21-day rule to credit cards. Barring that, it is seeking more time for compliance with the 21-day provision for open-end plans other than credit cards. Also, CUNA has met and discussed this issue repeatedly with the Fed. Earlier this week, the Consumer Federation of America, working with CUNA, expressed its concerns over this portion of the CARD Act in letters to the Fed and to Dodd. Late last month CUNA President/CEO Dan Mica encouraged credit unions to communicate directly with the Fed regarding this matter. CUNA issued a memo to help member credit unions deal with compliance issues created by the 21-day rule.